Louise Michelle Reeves v Simon Kevin Frain [2025] EWHC 2311 (KB)

“If you win you agree to pay us [10% for Simon Reeves; 24% for Mark McKinnon] of any money and any non-monetary award or settlement received.”

“1. Kevin Patrick Reeves (aka Kevin Patrick Frain) (the deceased or Kevin) was an extraordinary man who during his life built a fortune of up to £100 million from nothing. He died, unexpectedly, on 3 February 2019 at the age of 71 although he had been unwell for many years with chronic obstructive pulmonary disease, COPD, or emphysema. His death has unleashed a bitter feud between his children and grandchildren that culminated in a three week trial during which I heard from 49 witnesses about whether a will made by the deceased on 7 January 2014 (the 2014 will) was his valid last will and testament. 2. The Claimant, Ms Louise Reeves (the Claimant or Louise) is the youngest daughter of the deceased. She seeks to uphold the 2014 will and asks the Court to pronounce in favour of it in solemn form of law. Under the 2014 will, the Claimant received a specific property and the deceased’s Rolls Royce Phantom but most significantly she was left 80% of the deceased’s residuary estate. Her half-sister, Lisa Murray, the Third Defendant (Lisa) was left the remaining 20% of the residuary estate, together with a specific property. Lisa supports the Claimant in these proceedings and gave evidence for her. 3. On the other side and opposing probate being granted of the 2014 will is the Second Defendant, Simon Frain (aka Simon Reeves, aka Bill Reeves) (Bill) who is the second son of the deceased. He says that the deceased did not know and approve the contents of the 2014 will; alternatively that it was procured and executed by the deceased as a result of undue influence exercised by the Claimant on him. Bill seeks to propound an earlier will made on 18 April 2012 (the 2012 will) by which the deceased’s residuary estate was split as to 80% between the Claimant, Lisa and Bill (ie 26.67% to each child) and the remaining 20% was split equally between the Fourth and Fifth Defendants (Ryan and Ria, respectively). Ryan and Ria are both grandchildren of the deceased as their father is Mark Reeves (Mark), the eldest son of the deceased. Mark was estranged from the deceased and did not feature in any will of the deceased. Ryan is separately represented in these proceedings but wholeheartedly supports Bill’s case. 12. There are now only two broad issues for determination: (1) Whether the deceased knew and approved the contents of the 2014 will; and (2) Whether the deceased’s execution of the 2014 will was the result of the exercise by the Claimant of undue influence. 20. The deceased’s rags to riches story is quite incredible. He was born on 29 October 1947 and was given up by his biological mother (Beatrice Frain) as an orphan to the local convent. He was then fostered to a large family with the surname Reeves and they had Irish traveller origins. The deceased’s foster mother died when he was 10. It is believed that by the time he was 12, he had left school, although he probably did not attend much before that. It is said on behalf of the Defendants that, as a result, he never learned to read or write. 21. But he clearly possessed a sharp mind and tremendous business acumen. Everyone has attested to his skill with figures and there is little doubt that he used this and his ability to spot an opportunity and exploit it to his very great advantage. He was a tough no-nonsense negotiator and it brought him enormous success. His main business was property dealing, predominantly in the Southampton area where he lived, but he also dealt in cars, shares and currencies, making his own investment/trading decisions. 27. Largely because the Claimant sided with Mark against her father, she and the deceased also fell out and did not speak for 4/5 years between 2004 and 2009, when the Claimant was 18 to 23 years old. The deceased disapproved of the people the Claimant was mixing and going out with in particular her relationship with a Mr Stephen McCarthy who was part of a well-known crime family in Southampton. The Claimant suffered an horrific injury during this period by being glassed in a pub by another woman in a random attack but the deceased responded to this by using the memorable but highly disturbing phrase “lay with dogs and you get fleas”

“17 The statutory objective and the general principle (1) The general objective of this Part is the development of legal services in England and Wales (and in particular the development of advocacy, litigation, conveyancing and probate services) by making provision for new or better ways of providing such services and a wider choice of persons providing them, while maintaining the proper and efficient administration of justice.” (1) The general objective of this Part is the development of legal services in England and Wales (and in particular the development of advocacy, litigation, conveyancing and probate services) by making provision for new or better ways of providing such services and a wider choice of persons providing them, while maintaining the proper and efficient administration of justice.”

“The parties drew our attention to two recent cases considering the application of section 58AA. They illustrate, in my view, the courts’ awareness that provisions enacted to enable “new or better ways” for legal services to be provided should not be used either by the client to avoid paying their own lawyers for successful work done pursuant to the retainer or by the opponent to disrupt the proceedings and avoid the adverse costs consequences that normally follow from having fought and lost.”

“The law relating to champertous agreements with those conducting litigation 15 As Lord Phillips of Worth Matravers MR said, when giving the judgment of the Court of Appeal in R (Factortame Ltd) v Secretary of State for Transport, Local Government and the Regions (No 8) [2003] QB 381, 399, para 31, although no longer a crime, “champerty survives as a rule of public policy capable of rendering a contract unenforceable”

“A person is guilty of maintenance if he supports litigation in which he has no legitimate concern without just cause or excuse.”

“Because the question of whether maintenance and champerty can be justified is one of public policy, the law must be kept under review as public policy changes.” 17 A type of contract which has relatively often given rise to an allegation of champerty or maintenance is one between a claimant in a piece of litigation and the person conducting the litigation (almost always a solicitor or barrister) on the claimant’s behalf. At any rate until the recent past, the law had set its face against those who conduct litigation placing themselves in a position where they could profit from their clients’ success. As Lord Denning MR put it in Wallersteiner v Moir (No 2) [1975] QB 373, 393, “English law has never sanctioned an agreement by which a lawyer is remunerated on the basis of a ‘contingency fee’, that is he gets paid the fee if he wins, but not if he loses”, describing this as champerty. He relied at p 394 on a dictum of Lord Esher MR in Pittman v Prudential Deposit Bank Ltd (1896) 13 TLR 110, 111: “In order to preserve the honour and honesty of the profession it was a rule of law which the court had laid down and would always insist upon that a solicitor could not make an arrangement of any kind with his client during the litigation he was conducting so as to give him any advantage in respect of the result of that litigation.” “In order to preserve the honour and honesty of the profession it was a rule of law which the court had laid down and would always insist upon that a solicitor could not make an arrangement of any kind with his client during the litigation he was conducting so as to give him any advantage in respect of the result of that litigation.”

“34. The introduction of conditional fees shows that even this requirement of public policy is no longer absolute. This case raises the question of whether the requirement extends to expert witnesses or others in a position to influence the conduct of litigation and, if it does, whether on the facts of the present case the agreements concluded by Grant Thornton can be justified. “34. The introduction of conditional fees shows that even this requirement of public policy is no longer absolute. This case raises the question of whether the requirement extends to expert witnesses or others in a position to influence the conduct of litigation and, if it does, whether on the facts of the present case the agreements concluded by Grant Thornton can be justified. 35. [Reference is here made to an observation of Lord Denning MR in In re Trepca Mines Ltd (No 2) [1963] Ch 199, 219-220]. 36. Where the law expressly restricts the circumstances in which agreements in support of litigation are lawful, this provides a powerful indication of the limits of public policy in analogous situations. Where this is not the case, then we believe one must today look at the facts of the particular case and consider whether those facts suggest that the agreement in question might tempt the allegedly champertous maintainer for his personal gain to inflame the damages, to suppress evidence, to suborn witnesses or otherwise to undermine the ends of justice.””

“17. Until 1990 it was axiomatic that contingency fee agreements entered into by lawyers with their clients were illegal and contrary to public policy, because they gave lawyers an interest in the outcome of the litigation that could create conflicts between the lawyer’s interests and those of their client. That axiomatic position was authoritatively restated by Buckley LJ in Wallersteiner v Moir (No. 2) [1975] 1 QB 373 at 401D-E. 18. Because one of the foundations for the public policy rule was the need to avoid conflicts of interest, what is prohibited at common law is not merely entering into an agreement tainted by maintenance or champerty but also acting in accordance with such an agreement. “If anything is against public policy it is the solicitor undertaking or continuing to act for a party in litigation in circumstances where the solicitor stands to gain more from the action if it is won than if it is lost.”: see Awwad v Geraghty & Co [2001] QB 570, 594B–C per Schiemann LJ (emphasis added).”

“26. Even if it were open to us in the light of these authoritative statements to enter the choppy waters of public policy, which in my view it is not, I can detect nothing other than the solicitors’ speculative hope upon which it would be possible to base an assertion that public policy has changed since either Wallersteiner v Moir (No. 2) or the more recent cases of Awwad, Sibthorpe and Farrar which reaffirmed it. Any further modification of public policy in this area is for Parliament to establish and define: it is not for this court to attempt. This must be borne in mind when considering the issue of severance, not least because many of the authorities about severance are cases about restrictive covenants in contracts of employment, where the nature and scope of public policy are not the same as in the field of champertous retainers of solicitors.”

“(7) In this section— “payment” includes a transfer of assets and any other transfer of money's worth (and the reference in subsection (4)(b) to a payment above a prescribed amount, or above an amount calculated in a prescribed manner, is to be construed accordingly)” calculated in a prescribed manner, is to be construed accordingly)”

“… “payment” means that part of the sum recovered in respect of the claim or damages awarded that the client agrees to pay the representative, and excludes expenses but includes, in respect of any claim or proceedings to which these regulations apply other than an employment matter, any disbursements incurred by the representative in respect of counsel’s fees”

“I agree with my Lords that the appeal in this case should be dismissed. Because their reasoning is different, and because nobody can pretend that these Regulations represent the draftsman's finest hour, it is appropriate if I add a few words to explain my own approach to the issues.”

“… It may also (under the banner of loyalty to the will of Parliament) lead to the frustration of that will, because undue concentration on the minutiae of the enactment may lead the court to neglect the purpose which Parliament intended to achieve when it enacted the statute. Every statute other than a pure consolidating statute is, after all, enacted to make some change, or address some problem, or remove some blemish, or effect some improvement in the national life. The court’s task, within the permissible bounds of interpretation, is to give effect to Parliament’s purpose. So the controversial provisions should be read in the context of the statute as a whole, and the statute as a whole should be read in the historical context of the situation which led to its enactment.”

“3.17 The general principles of interpretation that apply to Acts apply equally to delegated legislation, but with the additional consideration that since delegated legislation derives its authority from the enabling Act it must be interpreted in light of that Act.”

“53 Provision for the regulation of DBAs was first introduced by section 154 of the Coroners and Justice Act 2009, which inserted a new section 58AA into the 1990 Act. This version of section 58AA was limited to DBAs relating to employment matters, but was otherwise in much the same [as the current version]”

“A working group of the Civil Justice Council considered DBAs in a report published in August 2015 (The Damages-Based Agreements Reform Project: Drafting and Policy Issues). The working group had been asked to make recommendations to the Government on whether the 2013 Regulations could be made more effective by some improvements”

“11 Construction of subordinate legislation. Where an Act confers power to make subordinate legislation, expressions used in that legislation have, unless the contrary intention appears, the meaning which they bear in the Act.”

“(4) The agreement— … (c) must comply with such other requirements as to its terms and conditions as are prescribed” (c) must comply with such other requirements as to its terms and conditions as are prescribed”

“Requirements of an agreement in respect of all damages-based agreements 3. The requirements prescribed for the purposes of section 58AA(4)(c) of the Act are that the terms and conditions of a damages-based agreement must specify— (a) the claim or proceedings or parts of them to which the agreement relates; (b) the circumstances in which the representative’s payment, expenses and costs, or part of them, are payable; and (c) the reason for setting the amount of the payment at the level agreed, which, in an employment matter, shall include having regard to, where appropriate, whether the claim or proceedings is one of several similar claims or proceedings.”

“(3) Subject to paragraph (4), in any other claim or proceedings to which this regulation applies, a damages-based agreement must not provide for a payment above an amount which, including VAT, is equal to 50% of the sums ultimately recovered by the client.”

“First, the object of the legislation was to permit the remuneration of lawyers by means of a share of recoveries.”

“(1) The court seeks to avoid a construction that produces an absurd result, since this is unlikely to have been intended by the legislature. Here, the courts give a very wide meaning to the concept of "absurdity", using it to include virtually any result which is impossible, unworkable or impracticable, inconvenient, anomalous or illogical, futile or pointless, artificial, or productive of a disproportionate counter-mischief. The strength of the presumption against absurdity depends on the degree to which a particular construction produces an unreasonable result. The presumption may of course be displaced, as the ultimate objective is to ascertain the legislative intention.”

“27 … The starting point must be the language of section 58(1) and (3) of the 1990 Act. It is clear and uncompromising: if one or more of the applicable conditions is not satisfied, then the CFA is unenforceable. Parliament could have adopted a different model. It could, for example, have provided that where an applicable condition is not satisfied, the CFA will only be enforceable with the permission of the court or upon such terms as the court thinks fit. There is nothing inherently improbable in a statutory scheme which provides that, if the applicable conditions are not satisfied, the CFA shall be unenforceable with the consequence that the solicitor will not be entitled to payment for his services. Such a scheme can yield harsh results in certain circumstances, especially if the client has not suffered any actual loss as a result of the breach. It can also produce results which, at first sight, may seem odd: see the point made by Mr Bacon mentioned at para 26 above. But the scheme is designed to protect clients and to encourage solicitors to comply with detailed statutory requirements which are clearly intended to achieve that purpose. The fact that it may produce harsh or surprising results in individual cases is not necessarily a good reason for construing the statutory provisions in such a way as will avoid such results. 28 Our attention was drawn to other statutory regimes which introduce a bar on the enforcement of rights which can operate harshly in certain circumstances. Thus, in Wilson v First County Trust Ltd (No 2) [2004] 1 AC 816, the House of Lords was concerned with a claim based on a loan agreement between a pawnbroker and a borrower. The pawnbroker sought repayment of the loan. Relying on section 127(3) of the Consumer Credit Act 1974, the borrower claimed that the loan was unenforceable because the agreement did not contain all the prescribed terms. This was a harsh result for the pawnbroker, since the borrower could not point to any prejudice suffered by her as a result of the failure to include all the prescribed terms in the agreement. Lord Nicholls of Birkenhead said, at paras 72-74: “72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non- compliance as they do where the borrower was misled. Parliament was painting here with a broad brush. “72. Undoubtedly, as illustrated by the facts of the present case, section 127(3) may be drastic, even harsh, in its adverse consequences for a lender. He loses all his rights under the agreement, including his rights to any security which has been lodged. Conversely, the borrower acquires what can only be described as a windfall. He keeps the money and recovers his security. These consequences apply just as much where the lender was acting in good faith throughout and the error was due to a mistaken reading of the complex statutory requirements as in cases of deliberate non-compliance. These consequences also apply where, as in the present case, the borrower suffered no prejudice as a result of the non- compliance as they do where the borrower was misled. Parliament was painting here with a broad brush. 73. The unattractive feature of this approach is that it will sometimes involve punishing the blameless pour encourager les autres. On its face, considered in the context of one particular case, a sanction having this effect is difficult to justify. The Moneylenders Act 1927 adopted a similarly severe approach. Infringement of statutory requirements rendered the loan and any security unenforceable. So did the Hire Purchase Act 1965, although to a lesser extent. This approach was roundly condemned in the Crowther report (Report of the Committee on Consumer Credit, under the presidency of Lord Crowther, March 1971) (Cmnd 4596), vol 1, p311, para 6.11.4: “It offends every notion of justice or fairness that because of some technical slip which in no way prejudices him, a borrower, having received a substantial sum of money, should be entitled to retain or spend it without any obligation to repay a single penny.” 74. Despite this criticism I have no difficulty in accepting that in suitable instances it is open to Parliament, when Parliament considers the public interest so requires, to decide that compliance with certain formalities is an essential prerequisite to enforcement of certain types of agreements. This course is open to Parliament even though this will sometimes yield a seemingly unreasonable result in a particular case. Considered overall, this course may well be a proportionate response in practice to a perceived social problem. Parliament may consider the response should be a uniform solution across the board. A tailor-made response, fitting the facts of each case as decided in an application to the court, may not be appropriate. This may be considered an insufficient incentive and insufficient deterrent. And it may fail to protect consumers adequately.” … 30 In our view, this is the approach which should be adopted in relation to section 58(1) and (3) of the 1990 Act. To use the words of Lord Nicholls, Parliament was painting with a broad brush. It must be taken to have deliberately decided not to distinguish between cases of non-compliance which are innocent and those which are negligent or committed in bad faith, nor between those which cause prejudice (in the sense of actual loss) and those which do not. It would have been open to Parliament to distinguish between such cases, but it chose not to do so. The conditions stated in section 58(3)(c) and in particular the requirements prescribed in the 2000 Regulations are for the protection of solicitors' clients. Parliament considered that the need to safeguard the interests of clients was so important that it should be secured by providing that, if any of the conditions were not satisfied, the CFA would not be enforceable and the solicitor would not be paid. To use the words of Lord Nicholls again, this is an approach of punishing solicitors pour encourager les autres. Such a policy is tough, but it is not irrational. The public interest in protecting solicitors' clients required that the satisfaction of the statutory conditions was an essential prerequisite to the enforcement of CFAs. It is to be noted that in September 1999, the Lord Chancellor issued a consultation paper entitled Conditional Fees: Sharing the Risks of Litigation. The Law Society and the senior costs judge responded that the Law Society's new Client Care Code adequately covered the need to provide additional information about CFAs. But in the view of the Government, such was the need to ensure client protection that this response was not accepted.”

“40 We should refer to the decision of this court in Jones v Caradon Catnic Ltd [2005] EWCA Civ 1821. The claimants’ solicitors claimed a success fee of 120% which exceeded the maximum prescribed by the Conditional Fee Agreements Order 2000 (SI 2000/823). The court held that there was a clear breach of the 1990 Act and the 2000 Order. Was it a material breach as explained by Hollins v Russell? Construing the CFA as a whole, the court held that there was no question that the client would ever have to pay a success fee of more than 100%. Accordingly, “this was not a case in which our attention should be devoted to consumer protection or client protection”

“I also accept that the phrase “specified financial benefit” is not confined to damages. Thus the expression “damages-based agreement” cannot be interpreted literally, as only applying to cases in which damages are paid (and not to debts or other forms of financial recovery).”

“However, the word obtains envisages the litigant acquiring something that they do not already possess by necessary implication, from the opposing party. That language is not apposite to describe a situation in which the defendant retains money or other assets of value, or is not required to make a payment or transfer of assets to the opposing party.”

“45 It was common ground before us that there is nothing in the Jackson Report that supports the concept of a DBA being entered into by a defendant in respect of an incoming claim. The Jackson Report recommended that lawyers should be able to enter into contingency fee agreements with clients for contentious business, subject to certain conditions, including the regulation of their terms. A “contingency fee agreement” was described in para 3.2 of the introductory chapter as one under which “the client’s lawyer is only paid if his or her client’s claim is successful, and then the lawyer is paid out of the settlement sum or damages awarded, usually as a percentage of that amount”

“However Hansard does record that, in answer to a specific question about whether DBAs could be used by defendants, the Minister of State, Lord McNally, made a statement in the House of Lords on 26 February 2013 (during the passage of the 2013 Regulations) to the effect that neither the Act nor the Regulations enable defendants to use DBAs, “not least because a DBA is enforceable only where the agreement makes provision for the payment of the fee from damages awarded” (Hansard (HL Debates), 26 February 2013, col 134). He made a similar statement in a letter of 5 March 2013 which was placed in the library of both Houses of Parliament.”

“51 There seems to me to be considerable force in those submissions, since it cannot be inferred that Parliament created an exception to a long- established common law prohibition by accident or oversight. The fact that there is nothing in the Jackson Report, the Parliamentary debates or in the Explanatory Memorandum to suggest that it was ever envisaged at the time of the legislative changes that litigation funding arrangements of this particular nature should be permitted, is a powerful indication that this was not Parliament's intention. On the contrary, the focus in the Jackson Report is upon permitting a successful client to pay his lawyers a percentage of what he recovers from the opposing party, which is something altogether different.”

“These Regulations prescribe the requirements with which a damages-based agreement (“DBA”) must comply in order to be enforceable under section 58AA of the Courts and Legal Services Act1990 (c.41) (“the Act”).”

“DBAs are a type of ‘no win, no fee’ agreement under which a representative (defined in these Regulations as a person providing the advocacy services, litigation services or claims management services to which the DBA relates) can recover an agreed percentage of a client’s damages if the case is won (“the payment”), but will receive nothing if the case is lost.”

“19 The Explanatory Memorandum to the 2013 Regulations, which was laid before Parliament with the Regulations, and can be used as an aid to their interpretation in case of ambiguity, describes a DBA as: """"a private funding arrangement between a representative and the client whereby the representative's agreed fee (""payment') is contingent upon the success of the case, and is determined as a percentage of the compensation received by the client.'' It explains that the Regulations prescribe the requirements with which an agreement between the client and representative must comply in order to be an enforceable DBA. 20 Para 2.3 of the Explanatory Memorandum summarises those requirements as follows: “(i) in all cases, the matters which the terms and conditions of an agreement must specify, including the reason for setting the payment at the agreed level (regulation 3); (ii) in civil litigation, stating the maximum payment (as a percentage of damages recovered and including VAT) that the representative may take from the claimant's damages (namely, in personal injury cases, 25% of the damages specified in these Regulations, and in all other civil litigation, 50% of the damages ultimately recovered by the claimant), as well as what the payment is intended to cover (regulation 4).” “(i) in all cases, the matters which the terms and conditions of an agreement must specify, including the reason for setting the payment at the agreed level (regulation 3); (ii) in civil litigation, stating the maximum payment (as a percentage of damages recovered and including VAT) that the representative may take from the claimant's damages (namely, in personal injury cases, 25% of the damages specified in these Regulations, and in all other civil litigation, 50% of the damages ultimately recovered by the claimant), as well as what the payment is intended to cover (regulation 4).”

“55 In my judgment, the language of the statute is clear. I accept that the draftsman chose to refer to the “recipient of the services” rather than to the “claimant” possibly to cater for the possibility that a DBA might be made in respect of what Mr Fulton described as an “outgoing” claim by a defendant, i e a counterclaim. I also accept that the phrase “specified financial benefit” is not confined to damages. Thus the expression “damages-based agreement” cannot be interpreted literally, as only applying to cases in which damages are paid (and not to debts or other forms of financial recovery). However, the word “obtains” envisages the litigant acquiring something that they do not already possess-by necessary implication, from the opposing party. That language is not apposite to describe a situation in which the defendant retains money or other assets of value, or is not required to make a payment or transfer of assets to the opposing party, even if this is the consequence of successfully resisting a claim for debt or damages, or a claim to those assets.”

“As the Judge held at para 50, that means it is a necessary prerequisite to the entitlement of a representative to payment under a DBA that the client has made a recovery from the other side to the litigation.”

“62 I am unable to accept those submissions. The argument falls at the first hurdle because the statute does not permit this type of agreement, for the reasons I have already stated. The Regulations do not conflict with the statute, but are entirely consistent with the concept that a DBA provides for payment to the representative to be made only from what is recovered by the client from the opposing party, and then only up to a prescribed percentage of the amount so recovered.”

“That is the fundamental premise upon which the Regulations were enacted. In order to be enforceable, a DBA must not only fall within the statutory definition, but also satisfy the conditions in section 58AA(4), including the requirements of the Regulations. A DBA which provided for payment to be made when there is no financial recovery from the opposing party would not do so.”

“63 Mr Williams’ ultra vires argument likewise depended upon the premise that the Regulations conflicted with the statute. Mr Williams submitted that the definition of “payment” in the Regulations and the word “recovered” were ultra vires because they went well beyond the requirement in section 58AA(4)(c) that a DBA should comply with “such other requirements as to its terms and conditions as are prescribed”

“64 In addition to the points on interpretation of section 58AA referred to in para 52 above, Mr Williams contended that the expression “specified financial benefit” in section 58AA(3) (which is wide enough to embrace the benefit of retaining an asset of value) and the definition of “payment” in section 58AA(7) (which envisages that the representatives can be paid under a DBA by the transfer or assets or any other transfer of money’s worth by the client) are in conflict with what the Regulations in fact permit to be used as the source of payment under the DBA. 65 This argument appeared to me to be based on a misconception of the function and scope of the Regulations, and their relationship with section 58AA, even if the premise upon which it is based-namely, that the statutory definition of a DBA embraces this type of agreement-were correct. The scheme of the Act was to permit DBAs (as defined) in principle, but then to confer a power on the Lord Chancellor to make Regulations which would include distinguishing between the types of DBA which can and cannot be made. The 2013 Regulations have only permitted agreements which provide for the representatives to be remunerated from sums recovered from the opposing party in respect of a claim (or counterclaim) made by the client, including, but not limited, to damages, which is entirely in line with the recommendations made in the Jackson Report.”

“The Lord Chancellor in exercise of the powers conferred by sections 58AA(4) and (5) and 120(3) of the Courts and Legal Services Act 1990(1), having consulted in accordance with section 58AA(6) of that Act, makes the following Regulations, a draft of which has been in accordance with section 120(4)(2) of that Act laid before and approved by resolution of each House of Parliament.”

“56 When the House of Lords was invited to approve the 2010 Regulations on 25 March 2010, the minister speaking to them, Lord Bach, said: “A damages-based agreement is a type of contingency or “no win, no fee” agreement, under which a representative agrees to act for a client in return for a percentage of any damages recovered by the client. If damages are not awarded, the representative is not paid. These agreements are of course different from conditional fee agreements, or CFAs. CFAs are typically used in court proceedings, and allow for an uplift or success fee on top of the representative's normal fee. I emphasise that damages-based agreements are not permitted in court proceedings or litigation and that the regulations will not change this. They are, however, commonly used by solicitors and claims managers in proceedings before the employment tribunal. The Courts and Legal Services Act 1990, as amended, controls the use of damages-based agreements to claims that are capable of being heard by the employment tribunal . . . 57 In his Final Report, Sir Rupert Jackson recommended that lawyers should be permitted to enter into “contingency fee agreements” with their clients in relation to civil litigation. “Contingency fee” was defined in the glossary as “A lawyer’s fee calculated as a percentage of monies recovered, with no fee payable if the client loses”

“3.2 Contingency fees (chapter 12) A contingency fee agreement may be described as one under which the client’s lawyer is only paid if his or her client’s claim is successful, and then the lawyer is paid out of the settlement sum or damages awarded, usually as a percentage of that amount. Lawyers are not presently permitted to act on a contingency fee basis in “contentious” business. 3.3 It is my recommendation that lawyers should be able to enter into contingency fee agreements with clients for contentious business, provided that: ● the unsuccessful party in the proceedings, if ordered to pay the successful party’s costs, is only required to pay an amount for costs reflecting what would be a conventional amount, with any difference to be borne by the successful party; and ● the terms on which contingency fee agreements may be entered into are regulated, to safeguard the interests of clients. Permitting the use of contingency fee agreements increases the types of litigation funding available to litigants, which should thereby increase access to justice.”

“The three matters identified by the MoJ in its consultation paper CP 10/9 are the principal matters which will require regulation. In my view the regulations which the MoJ is planning to introduce in respect of contingency fees in tribunal proceedings should be suitably adapted for the purpose of court proceedings. The regulations should (i) introduce a requirement that clear and transparent advice and information be provided to consumers on costs, other expenses and other methods of funding available; (ii) provide a maximum percentage of the damages that can be recovered in fees from the award; and (iii) control the use of unfair terms and conditions.” “A damages-based agreement is a type of contingency or “no win, no fee” agreement, under which a representative agrees to act for a client in return for a percentage of any damages recovered by the client. If damages are not awarded, the representative is not paid. These agreements are of course different from conditional fee agreements, or CFAs. CFAs are typically used in court proceedings, and allow for an uplift or success fee on top of the representative's normal fee. “3.2 Contingency fees (chapter 12) A contingency fee agreement may be described as one under which the client’s lawyer is only paid if his or her client’s claim is successful, and then the lawyer is paid out of the settlement sum or damages awarded, usually as a percentage of that amount. Lawyers are not presently permitted to act on a contingency fee basis in “contentious” business. 3.3 It is my recommendation that lawyers should be able to enter into contingency fee agreements with clients for contentious business, provided that: ● the unsuccessful party in the proceedings, if ordered to pay the successful party’s costs, is only required to pay an amount for costs reflecting what would be a conventional amount, with any difference to be borne by the successful party; and ● the terms on which contingency fee agreements may be entered into are regulated, to safeguard the interests of clients. Permitting the use of contingency fee agreements increases the types of litigation funding available to litigants, which should thereby increase access to justice.” “The three matters identified by the MoJ in its consultation paper CP 10/9 are the principal matters which will require regulation. In my view the regulations which the MoJ is planning to introduce in respect of contingency fees in tribunal proceedings should be suitably adapted for the purpose of court proceedings. The regulations should (i) introduce a requirement that clear and transparent advice and information be provided to consumers on costs, other expenses and other methods of funding available; (ii) provide a maximum percentage of the damages that can be recovered in fees from the award; and (iii) control the use of unfair terms and conditions.”

“Expenses typically include … Fees paid to a barrister. These may be for advice given in a conference, or for representing you at a hearing. If your case settles shortly before a hearing, and your barrister has already undertaken the preparation for that hearing, then you may still have to pay for part of their fee.”

“… “payment” … excludes expenses but includes … any disbursements incurred by the representative in respect of counsel’s fees”

“… a DBA is a contract which includes a provision for sharing recoveries. But another view is that if a contract of retainer contains a provision which entitles a lawyer to a share of recoveries; but also contains other provisions which provide for payment on a different basis, or other terms which do not deal with payment at all, only those provisions in the contract of retainer which deal with payment out of recoveries amount to the DBA.”

“1 A client enters into a contract of retainer with solicitors to prosecute a claim. The contract provides that in the event of success the solicitors will be entitled to a share of the recoveries. The client achieves success by means of a settlement of the claim; and the solicitors claim their share. But the contract also contains a clause which says that if the client terminates the retainer prematurely (which she did not), she must pay the solicitors' normal fees and disbursements. Does the existence of that clause invalidate the whole contract? Judge Parfitt held that it did not.”

“With the exception of the circumstances set out in clause 6.3 . . . you may terminate this Agreement at any time. However, you are liable to pay the Costs and the Expenses incurred up to the date of termination of this Agreement within one month of delivery of our bill to you.”

“31 The only mitigation of this strict approach is that, as was made clear in Hollins v Russell, the breach must be material in the sense described at para 107 of the judgment. Thus, literal but trivial and immaterial departures from the statutory requirements did not amount to a failure to satisfy the statutory conditions. It is unnecessary to decide whether the test stated at para 107 was no more than an application of the principle that the law is not concerned with very small things.”

“The common law 5 Retainers under which a lawyer was entitled to a share in the client's recoveries were long prohibited at common law on grounds of public policy on the ground that they were “champertous”, although public policy is capable of changing: Kellar v Williams [2005] 4 Costs LR 559, para 21. 6 At common law, where all the terms of a contract are illegal or contrary to public policy, the contract is unenforceable. Where, however, only some of the terms are illegal or contrary to public policy, the court can in some circumstances enforce those parts that are not illegal or contrary to public policy. The general rule is that where you cannot sever the illegal from the legal parts of a contract, the contract is altogether void, but where you can sever them “you may reject the bad part and retain the good”: Chitty on Contracts, 33rd ed (2019), para 16-237. 7 The criteria that must be fulfilled before severance is possible are that (a) the offending provision can be removed without modifying or adding to other terms of the agreement; (b) the remaining terms continue to be supported by adequate consideration and (c) the removal of the unenforceable part of the contract does not change the nature of the contract, such that it is not the sort of contract that the parties entered into at all: Egon Zehnder Ltd v Tillman [2020] AC 154.”

“62. Even if I were wrong in this conclusion, I would hold that severance is precluded as contrary to public policy. The principal effect of severance would be to permit partial enforcement of the unenforceable CFA. As was pointed out during submissions, if the client lost the arbitration, the effect of allowing severance would be that the solicitors would recover precisely the same amount of their fees as if the CFA had been held to be enforceable. That is not, in my view, a tolerable outcome. Nor is it any answer to submit that there is no disadvantage to the client in enforcing the discounted fee element in respect of work carried out for and at the client’s request. The regime imposed by the 1990 Act is concerned with conflicts of interest giving rise to potential harm to clients: see Garrett per Dyson LJ at [38]–[39]. 63. The effect of implementing public policy, as explained by Dyson LJ at [27]– [30] of Garrett, cited at [21] above, is that “if the applicable conditions are not satisfied, the CFA shall be unenforceable with the consequence that the solicitor will not be entitled to payment for his services”. 64. Awwad, like the present case, involved a CFA of the type that has been described as a “discounted fee agreement”

“expenses: the cost of instructing third parties, such as barristers and experts, any fees payable to the third parties, and our disbursements as set out in Paragraph 9, incurred in connection with the pursuit of your claim[s].”